Industry Analysis Report

Following News Corporation (Miller 2009) and Fairfax’s (Palan 2009) early August announcements regarding the future of online journalism, there has been much debate over the possible success or failure regarding free and paid for news. Studying News Corporation, Fairfax Media Limited and independent news site Crikey, I will attempt to answer the question;

How likely are the general public to accept a ‘paid-for’ model of online news in Australia? In order to answer such a question, we must look at how News Corporation, Fairfax and Crikey operate in the online sphere and also at their readership. Whilst similarities can be drawn between the three companies, between Fairfax and News Corporation in particular, they do all operate curiously differently in the online realm, to varying degrees of success. Crikey: An independent, online only, news source, Crikey aggregates many stories from a variety of different major news sites and also publishes original articles. Papers such as Bloomberg, The New York Times, Newsweek and all Australian print news have their articles linked from the Crikey main page. Furthermore, Crikey features several blogs and a ‘members only’ section of the site. This so-called ‘Daily Mail’ section of the site is an online archive of past editions of the daily email, containing all original articles and content, which is sent out to paying members. Despite having minimal, though undisclosed, employees (Crikey n.d.), Crikey claims to have 30 000 regular viewers of their site, with an addition 15 000 paying subscribers (Crikey 2009). Since their 2000 inception, Crikey have never once had a print equivalent to their online news, solidifying them as a bastion of Australian new media journalism. This position is only helped by the site’s podcasts, frequenting blog updates and twitter activity. Their independent status allows them a less rigorous attitude towards jokes and, in keeping with the site’s name, so-called Australian larrikinism. Despite being an independent news source, and offering a paid-for member section, Crikey still features advertising on their website- though largely advertisements are related to new media avenues, such as website design and management. Fairfax: Fairfax, in comparison to Crikey, is a multinational media corporation with some 8900 employees. In regards to online news, Fairfax offers internet versions of their print newspapers, which update as news develops. These sites also feature videos, links to journalists’ blogs and Andrew McDonald

online versions of their weekend ‘Drive’, ‘MyCareer’ and ‘Domain’ magazines. Despite this seemingly large array of internet media, Fairfax does not offer any substantial content exclusively for the online sphere. The blogs are often simply syndicated versions of the writer’s print articles and their twitter profiles are often slowly published links to articles from the day’s paper. Recently though, approximately one month after declaring a ‘paid for’ model of online news in the future, Fairfax have created a website titled “National Times” This site offers blog posts, articles, short opinion pieces and analysis and commentary from both Fairfax writers and general media personalities. It is set up much like News Corporation’s “The Punch”, albeit in a more formal style. This service employs a better usage of twitter (only updating occasionally, with noteworthy articles) and an easier to navigate RSS feed. All content on the Fairfax news sites is entirely free and without ‘subscription only’ pages, but until the introduction of the National Times site, Fairfax news sites were effectively just electronic newspapers. News Corp: News Corporation is, perhaps, the most interesting case of the three companies. Being one of the largest companies in the world, and amassing a huge portion of the company’s fortune in news media, News Corporation has a massive and interesting online presence. In Australia, the majority of their sites are just like their Fairfax equivalents (one could be forgiven for confusing The Australian and SMH websites), yet there are notable examples. Aside from being lucky enough to score the news.com.au URL, and make it an aggregator for all Australian News Corporation news websites, News Corporation features several specific ‘news junkie’ websites; The Punch springs to mind. Updates several times a day, The Punch is effectively a blog with no real regular publishers, a revolving door of journalists, media personalities and academics giving their extended opinions on news and current affairs. It seems to aim to attract a similar audience to Crikey; people who like a more in-depth news article, filled with opinion. Links to the day’s news headlines littering the site, of course, all link to other News Corporation websites. Specialty news sites, like The Punch, may be less common than the electronic versions of their newspapers, but it shows that News Corporation has certainly got some ideas grounded in new media expansion. Both Fairfax’s and News Corporation’s announcements to start charging for online news should really have come as no surprise, considering their recent financial track records. Whilst both companies (Google Finance 2009A&B) have improved since earlier this year, their share prices are substantially lower than what they were in 2007; arguably when online news was starting to

Andrew McDonald

make its mark for many (Project for Excellence in Journalism 2009). Crikey’s readership numbers are very interesting, as it implies that approximately one third of news junkies, Crikey’s presumed audience, are willing to pay for their news. However, it must be noted that Crikey is an independent news source, actively going against the Farifax/Murdoch grain, which would certainly be an incentive for many paying subscribers. With 988 000 paying subscribers (Crosser 2007), the News Corporation owned Wall Street Journal is noteworthy as being one of the rare examples of a news pay-site which has been successful (Ahrens 2009), though it was a pay-site long before News Corporation acquired it. There was even a brief period where Rupert Murdoch doubted the relevance of a subscription model for the paper (Nicole 2007). Fairfax and News Corporation seem committed to changing to a paid-for model of online news and journalism, despite commentators long decrying it as ineffective (Sung 2009) (Palser 2008 p48). Whilst it is impossible to predict the future, I really doubt that the general public will be aboard this change. Unless there is some sort of a print/online subscription deal, or both Fairfax and News Corporation seriously boost their new media expertise and presence, the general populace will not like paying for something which was previously free. Naturally, there will be small numbers who take up the offer, but I do believe they will be in the vast minority. If one is going to pay for online news, why wouldn’t one side with Crikey, who’ve been an impressive, respected and proficient new media news source for years. Indeed, it may be Crikey who end up the winners out of this new situation.

Andrew McDonald

Bibliography Ahrens, Frank 2009, Murdoch: I Will Start Charging for All Online News, The Washington Post, accessed 20/9/2009, http://voices.washingtonpost.com/economywatch/2009/08/murdoch_i_will_start_charging.html Crikey 2009, Crikey Advertising Rate Card March 09, accessed 16/9/2009, http://www.crikey.com.au/wp-content/uploads/2009/03/crikey-rate-card_march09.pdf Crikey n.d., About Crikey, accessed 16/9/2009, http://www.crikey.com.au/about/ Crosser, Cynthia 2007, It All Began in the Basement of a Candy Store, The Wall Street Journal, accessed 20/9/2009, http://online.wsj.com/article/SB118591182345183718.html Google Finance 2009A, Fairfax Media Limited (Public, ASX: FXJ), accessed 23/9/2009, http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh =0&chdet=1253685600000&chddm=220178&chls=IntervalBasedLine&q=ASX:FXJ&ntsp=0 Google Finance 2009B, News Corporation (Public, NASDAQ: NWSA), accessed 23/9/2009, http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh =0&chdet=1253685600000&chddm=220178&chls=IntervalBasedLine&q=ASX:FXJ&ntsp=0 Miller, Lisa 2009, Online Charges to Recoup Losses: News Corp, ABC Online, accessed 6/8/2009, http://www.abc.net.au/news/stories/2009/08/06/2647396.htm Nicole, Kristen 2007, Murdoch to Set the WSJ Free?, Mashable.com, accessed 23/9/2009, http://mashable.com/2007/09/18/wsj-free/ Palan, Simon 2009, Fairfax Flags Online Charge Plans, ABC online, accessed 19/8/2009, http://www.abc.net.au/lateline/business/items/200908/s2651895.htm Palser, Barb 2008, ‘Free at last: why major news outlets are giving up on charging for online content’, American Journalism Review, vol.30, no.1 Project for Excellence in Journalism 2009, The State of News Media 2009, Journalism.org, accessed 19/9/2009, http://www.stateofthemedia.org/2009/narrative_online_audience.php?cat=2&media=5 Sung, Daniel 2009, Why News Corp and the Wall Street Journal will fall firmly on their face, TechDigest, accessed 22/9/2009, http://www.techdigest.tv/2009/05/why_news_corp_a.html

Andrew McDonald